External Influences

Question 1

when analysing the impact of a change in PESTLE factors, think about

Answer 1

1. impact on costs
2. impact on demand - volume, PED

Question 2

how can competition impact business decisions?

Answer 2

LN PQ

1. location more convenient - higher footfall thus higher sales BUT higher FC and BEP
2. niche market - less direct competition so premium price BUT less sales growth potential
3. prices lower - increase competitiveness thus win sales and market share BUT lower margins and quality image
4. quality of output or customer service - greater customer satisfaction so repeat purchase and loyalty BUT higher costs of inputs and/or training so higher prices

Question 3

pros of privatisation for stakeholders

consumers, employees, govt, shareholders - main and easiest to write about SEG-C!!!

Answer 3

S: profit incentive increases efficiency - lower costs thus higher profits (provided rev) so higher dividends

E: profit incentive may lead to cost cutting through wages/employment - less job/pay security thus demotivation

Question 4

cons of privatisation for stakeholders